The balance of power among Chinese manufacturers has changed in late 2015. For a number of years now, it was Xiaomi that led the pack of small Chinese upstarts trying to make it big in the global market, and Huawei was viewed as a telecommunications company that sold smartphones on the side. Fast forward to the end of 2015 and looking at 2016 in perspective, Huawei is setting the pace to become the biggest China-based phone maker ever, and the signs are that it will be for a good bit of time.
Huawei has recently put out some impressive numbers for its third quarter finances and sales. It has sold 27.4 million smartphones worldwide for Q3 of 2015, up 63% from the year before. In China, Huawei’s own market and one that is growing by the minute, Huawei’s shipments rose a huge 81%. But perhaps more importantly for the company’s bottom line, Huawei sold a lot more mid-to-high-end products, which boosts better specs, with higher price tags, and thereby got solid margins.
In 2014, Huawei generated over USD$46.5 billion in revenue – due largely to sales of telecommunications and networking equipment, but that is bound to change now as Huawei branches out into better markets, and not primarily of sales in China. Huawei sells about half of its smartphones outside of its home country. They have made strategic marketing investments in high-growth markets like Latin America and the Middle East, but they have also kept up numbers in more mature markets that are important for visibility, like Western Europe, Australia, and the US.
In July, it was revealed that Huawei, not Xiaomi, was the world’s third-largest smartphone maker – just behind leaders Samsung and Apple. Samsung’s shipments were down 2.3% year-over-year, but Huawei’s shipments were up 48.1% during the same period. “For Huawei, they have been one of the more impressive smartphone makers this year and I expect they will continue this momentum right into 2016,” says IDC program director and market analyst Ryan Reith. “Huawei will most likely be the first Chinese smartphone maker to surpass 100 million shipments in a year ever. Most people thought this would have been Xiaomi.”
So with rumors coming out that Google seems to have been happy with Huawei enough to give them another shot at the 2016 Nexus phone, the future seems unbelievably bright for Huawei. The Nexus 6P has been well-received and Google seems to have no particular reason to switch manufacturers at this stage. And with Huawei bringing their Honor sub-brand into North America, we can only see good things coming for the Chinese company.